What is a better way to reduce financial risk?
Answer and explanation
Correct answer: Preparing a budget and controlling expenses
A budget estimates expected income and expenses, sets priorities, and provides a basis for monitoring actual spending. Expense control can prevent waste and help identify a shortage of funds early. Unplanned borrowing, concentrating all capital in one activity, and stopping records increase uncertainty and financial exposure rather than reducing it.
Frequently asked questions
What is the correct answer to this question?
Preparing a budget and controlling expenses
Why is this the correct answer?
A budget estimates expected income and expenses, sets priorities, and provides a basis for monitoring actual spending. Expense control can prevent waste and help identify a shortage of funds early. Unplanned borrowing, concentrating all capital in one activity, and stopping records increase uncertainty and financial exposure rather than reducing it.
Which subject and chapter does this question cover?
This is a Class 11 Business Studies question. Chapter: Business, Trade and Commerce. Topic: Business Risk.
